Free This Debt to Live a Comfortable Retirement!

As we become an adult, we face extremely challenging experiences like budgeting our salary to pay our bills and responsibilities. We realize how difficult it is to save our money to live a comfortable life and retirement.

Oftentimes, we find ourselves having debt, either for our mortgage, car loans, or personal loans. Not to mention we still need to prepare for our retirement fund. If you’re one of these challenged working adults who struggle to pay off their debts and build their retirement funds, then the financial experts recommend you to focus on eliminating this debt first to increase your chances of having a better retirement.

The Burden of Mortgage Debt

Out of all debts a working adult may avail, Winnie Sun, a financial advisor, recommends you get rid of your mortgage debt or payments before you retire as much as possible. She also advised the working adults to focus on paying it down as soon as possible as it can help you prepare your retirement better.

According to her, you don’t need to wait for 30 years or so just to pay your debt. If you don’t do anything to quickly pay your mortgage, you might end up still paying your debt during your retirement days.

Sun said the fewer payments and bills you have, the more money you can save and prepare for your retirement

In order to live a mortgage-free debt life, especially when you retire, Sun recommends you up your payment by 5-10%, depending on how much you can afford. In this way, you’ll be able to pay your mortgage faster.

She noted that the current mortgage debt value is now around $73, 923. And the results of the recent study revealed that most people with ages ranging from 56-61 are still paying off this debt, and its rates are rising every year compared to $27,493 mortgage debt last 1992. Of course, Sun also emphasized not to leave your retirement savings hanging while you pay off your mortgage debt.

Tips to Pay Your Mortgage Debt

If you’re struggling to eliminate your mortgage debt, the financial experts recommend you apply the following tips:

Make Sure You’re Ready to Buy a New Home

The financial experts recommend you to use the free mortgage calculator to determine the worth of a house you can afford

Before you start searching for a real estate agent and canvassing for your preferred home, it’s important to make sure you’re financially stable enough to buy a new house. These six questions will help you assess your current financial status to determine whether or not you’re ready to apply for a mortgage.

Are you currently debt free?

Do you have at least 6 months worth of your salary for emergency funds?

Can you pay at least 10-20% downpayment for your mortgage?

Do you have enough money to cover your moving expenses?

Can you afford to pay for a 15-year fixed-rate mortgage loan?

Can you afford to buy the utilities or pay the maintenance for your new home?

Downsize

Downsizing your lifestyle and properties can be a great help in maximizing your money and retirement funds. For example, consider selling or renting a few rooms in the larger home you have and use it to buy a smaller home. If possible, try to pay in cash method for your new home to avoid being in debt.

If not, at least you’ll still be able to eliminate your mortgage debt sooner because of the smaller balance you have.

Be Minimalist

You might think that spending $1 for a sandwich or $10 for your fast food meal may not hurt your pocket or savings, but that’s where you’re dead wrong. Instead of spending $100 or so per month for your lunch and dinner takeout, you can allocate it to paying for your mortgage debt.

In fact, doing so can help save you $28,000 or more for your mortgage interest. If you make small sacrifices today, you’ll be able to save $25,000 of mortgage interest and which means four years worth of your mortgage loan.